Prices for 256Mbit DDR effective tested (eTT) chips have risen to US$2.49, up from US$2.04
last week, while contract prices have risen 5% to US$2.61, due to decreased supply in both
markets and stronger demand from China, according to DRAMeXchange and DRAM
distributors.

However, although the DRAM market is showing signs of recovery, Frank Wang, an executive
director with Morgan Stanley in Taipei, was quoted by the Chinese-language Economic Daily
News as expecting DRAM contract prices to fall 5-10% this month.

In addition, Wang pointed out that despite the recent rise, DRAM prices have fallen more than
30% since the start of this year, and the major Taiwan-based DRAM makers, including
Powerchip Semiconductor Corporation (PSC), Nanya Technology may all report losses this
quarter.

Taiwan-based DRAM module makers and distributors also remain doubtful about the DRAM
industry this quarter. The second quarter is the traditional slow season for the DRAM industry
and DRAM demand has not significantly picked up, the companies were quoted by the
Chinese-language Commercial Times as saying.